Safer way to trade in options

Try Ready-made Option Strategy


2X leverage on 200+ stocks

Try Margin Trading Facility

Introduction to Cover Orders

Blog | imported-posts

Introduction to Cover Orders

A Cover Order is a special type of order through which the user can take an intra-day position and take advantage of extra exposure while being protected through a stop loss order. Here is how it works.

The system will place two orders simultaneously: a market order and a corresponding stop loss market order which would only get triggered at the specified stop loss trigger price. If the trigger price is hit, the stop loss order gets executed as a market order. The combination of both these orders being placed simultaneously is known as a Cover Order. Cover Orders help you limit any potential losses that could be incurred on a position.

Benefits of Cover Orders

Limited Risk and Maximum Profit: Due to the inherent way Cover Orders work, they help traders minimize downside risks and provide better control over risk management. Since there is always a stop loss corresponding to each trade, Cover Orders can help users trade in a more disciplined manner. Users can take advantage of the margin benefits as well, using the Cover Order facility to leverage their positions greatly while enjoying the benefits of a stop loss to protect them from downside risk. Overall, Cover Orders reduce downside risk but do not impose any limits on their returns. This is a classic example of a win-win situation.

How Cover Orders Work:

  • A Cover Order is basically a two legged order. The client needs to place a buy/sell order with compulsory corresponding stop loss order in the opposite direction.
  • The first entry order will always be a market order.
  • The corresponding stop loss order will sit in the order book as a Stop-Loss trigger pending order; once the trigger price hits the stop loss limit price, it gets triggered as a market order.
  • The trigger price range will be defined daily and the client must place the stop loss order within the specified range. For example, suppose Reliance Industries is trading at Rs. 900 and the range is specified as 10%. In this case the client can specify the Stop Loss order between the price range of Rs.810 to 990 as the trigger price.
  • Once the Cover Order has been placed and the first leg has been traded, the client will not have the ability to cancel the Cover Order. The client can only exit the current one sided position.
    • In the very rare case in which the first order is an open order pending at the exchange and has not been traded, the client can cancel the Cover Order.
    • The stop loss order can be modified within the stipulated price range. After the order has been modified, the margin will be recalculated.

How to Place Cover Orders

Executing a Buy Cover Order Entry: The client can execute a buy Cover Order from the Orders and Trades menu. The client can also execute a Cover Order entry from the Market Watch screen by utilizing the keyboard shortcut Shift+F1 for the script he wants to trade.

Executing a Stop Loss Sell Order: After placing a buy Cover Order, a stop loss sell limit order will be placed. The stop loss buy order trigger price must be within the range that is displayed on the trigger price range box. The Trigger Price Range is the Last Traded Price + Trigger Percentage of the LTP price.


Executing a Sell Cover Order Entry: The client can execute a sell Cover Order from the Orders and Trades menu. The client can also execute a Cover Order entry from the Market Watch screen by utilizing the keyboard shortcut Shift+F2 for the script he wants to trade.


Ready-made Option Strategies

The safer way to trade in options


Executing a Stop Loss Buy Order: After placing a sell Cover Order, a stop loss buy limit order will be placed. The stop loss buy order trigger price must be within the range that is displayed on the trigger price range box. The Trigger Price Range is the Last Traded Price + Trigger Percentage of the LTP price.


Modification of Cover Orders:  After a Cover Order is placed, the client can see the Stop Loss pending order from the order book. The Client can open the order book from the order and trades menu. The client can also use the shortcut key F3 to open the order book. Modification of a stop loss order is allowed up to the stipulated trigger price range.

Cancellation of Cover Order: Cancellation is not allowed for Cover Orders.

Exiting a Cover Order position: Exiting a cover order position will place a market order in the opposite direction for the first leg. Once the order has been executed, the stop loss order will automatically get cancelled. The client can only exit the position by pressing the exit button from the order book after selecting the order he wishes to exit. The exit button is located at the bottom of the order book.


Example of a Cover Order: Nifty Futures

A client places a buy Cover Order on NIFTY FUTURES where the LTP of NIFTY is 6200. Therefore, he would be allowed to place a stop loss order in the range of up to 5 % below 6200; i.e. 5890.

The margin calculation will be the higher of:

  1. Price difference % between Leg 2 SL order and Leg 1 LTP * 1.5
  2. Min Margin % of the value traded

The applied margin is as displayed below for different stop loss prices. (Min margin % is 2.5% for NIFTY Futures).

Sell SL Range
SL PriceMargin
5800Not Allowed

Example of a Cover Order: Equities

A client places a buy Cover Order on INFY where the LTP of INFY is 3665, and he would be allowed to place a stop loss order in the range of up to 10 % downside; therefore, he can place he sell stoploss at a price of 3482 or above. The applied margins are as displayed below for different stop loss prices (Min margin % is 5%).

Quantity (in shares)Sell SL Range
SL PriceMargin
1003250Not Allowed

Downloading Margin Files

Margin files are updated daily here.

Never miss a trading opportunity with Margin Trading Facility

Enjoy 2X leverage on over 200+ stocks


56 responses to “Introduction to Cover Orders

    1. Great Work done from your end. Actually when I opened my trading account two month’s back,I given feedbck to start cover order facility(I used this facility before in edelweiss trading account)…now RKSV started….I hope in future RKSV should be role model for future stock broker’s…
      Your helpdesk platform is also great…..just need a better marketing strategy to capture Indian Retail Market…Best Wishes…

  1. Good work , I like you to get implemented for Index and equity options also.

    secondly even this help, I need to see that you develop Stop buy/sell order
    with Trailing stops. with points that I can specify to trail.

    Further to that as I pyramid into say stop buy order all stop quantity should
    merge into one trailing stop order and trail within the limit points / percentage range
    you may have specify

    By the time you do that I request you to have Nest traders should allowed
    directly to linked with NinjaTrader then all order placing will be automatically
    taken care

    1. Why are cover order compulsarily market orders? Due to my work nature, I cannot be present infront of the system. I want to place a stoploss buy order alongwith with a cover sell order. Can you make that possible? I want my buy order to trigger when a specific price is reached and then only activate the cover stoploss order.

      Also, is there any problem with the web trading platform? It seems not to be working since I got this cover order email.

      1. Hi Ganesh,

        Thanks for your question. What you’re asking is considered “algo/automated trading” by regulations and can’t get approved by the exchange. What you can do in the meanwhile, is place an MIS order along with a stop loss order.

        Regarding the web platform, there are no errors on our side — can you shoot an email to support@upstox.com and we’ll take a look?

        1. Well, essentially, bracket order is what I am talking about. I have sharekhan tradetiger account as well, and they allow this trigger price option alongwith bracket orders option. So instead of market order, I can place a trigger price of my choice alongwith stoploss and book profit price.
          If you can get this into NEST then it will be helpful.


    2. Hi sudhir,

      Cover order on options will come soon. We will also release it for currency derivatives soon.

      For an order + trailing stop loss, it’s not a cover order, it’s called a bracket order. We are working on getting it on our platform fairly soon.

      On NinjaTrader — yes we will send that info to our product team to see what they can do.


  2. Just Great work… We need it in NSE NOW mobile app please bring to that platform. We trade from NSE NOW mobile because we are serviceman so not possible from terminal please bring it quickly…

      1. Sir can I get the facility of cover order in “call and trade” option?? If so then please give that facility because its not possible for every one to trade from Terminal.

          1. Target order is not allowed in cover order, you can only place SL order in cover order. Target order is allowed in bracket order. We are working on getting it on our platform fairly soon.


      1. I am very happy to know about cover orders. It is a great deal and supporting for small traders. I understood how to place cover orders but I got a prob that after placing a buy order at the 11100 and I want to square it off ; so how will it work?.

        Bought Bank nifty at 11100 and now it is 11150 and I want to sell at 11150. so I use Shift + f2 . thereafter do I have to do anything else. ?

        Will my position be all over ?

        Am I out of Market with no posiiton ?

        I dont know First leg or Second Leg ?

        1. Thanks for the feedback, there are two option to square of the current position:

          1) You can modify the SL to Rs. 11150, only condition is LTP should be 11150 or higher.

          2) From order book select the trigger pending order and click on the exit button located in the bottom right side of the order book. This will cancel your SL order and sqr off your leg 1 position.

    1. Dear Sir,
      Please explain be the below

      In cover orders , for example 1$ is trading around 60.50.
      Suppose i want that my COVER ORDER should get executed when the $ reaches 60.70 . Can i do the same by using limit and book from the current level. I mean can i use limit first in the cover order?

      1. The initial order (or say first leg) is always a market order and thus limit price cannot be kept.
        Cover orders are currently not available in Currency segment. We are working on making it available soon.

        1. Dear Abhay,

          We are happy to inform you that the feature requested by you few months ago, where you can place Stop loss and target sell order together is now enabled in our trading platform. Name of this product is Bracket order.


      1. Don’t trade blindly in this market level trading is the only way to trade and end your month in profit.we are providing the Intraday as well as very short-term (3-4 days) positional calls with very high accuracy those who want to learn Technicals can also contact me on 09096545486. GTALK- abhay.gaglani@gmail.com WhatsApp- 09096545486

  4. Sir, Cover Orders are really great but is it possible to partly close an order? For eg, if I buy 10 lots of Crude then can I exit 5 lots first and later remaining 5 lots? How can this be done?

      1. Ok. It will be great if you all see if this becomes possible sometime in the future. It will be a great function. Thanks

    1. Cover orders and Bracket Orders are allowed on basket of stocks on Upstox.
      The basket of stock includes Nifty CNX 200 stocks and the F&O underlying stocks.

  5. Can you explain in hindi laungage. as i am a entrylevel trader, its getting hard to understand?

  6. Please teach how to use upstox trading platform in hindi? most of user like me. doesnt understand English language.

  7. How To Place Cover Order For Buy And Short Sell Please Explain, Suppose I Want To Buy A Stock Whose Current Price Is 100 And I Want To Buy From 104 (Only I Have To Buy At This Price Not More Or Less Than That) Then How, And I Want to Short Sell A Stock Whose Current Stock Price Is 98 And I Want To Short From 96(Only I Have To Buy At This Price Not More Or Less Than That) Then How?

Leave a Reply

Your email address will not be published. Required fields are marked *